India's Experience in Poverty Reduction: An Alternative Path Found

^{Agriculture has been proven to reduce poverty. / Álvaro Bernis}
For many years, economists have believed that rapid industrialization is needed first and foremost to reduce poverty. This is supposed to improve the livelihoods of the poor by getting jobs in factories. However, the experience of India refutes this view.

According to research by economists Surjit Bhalla and Karan Bhasin, survey results for 2024-2025 show that the share of the population in India living below the international poverty line of $2.15 a day (in purchasing power parity) will be just 1 percent. This is a sharp contrast to the situation in the 1990s, when almost 50 percent of the population was below the poverty line.

The most striking thing is that India has achieved this result despite the fact that 40 percent of the population is still employed in agriculture.

Compared to industrialization, as in China, India has created the basis for its population to increase their incomes in the countryside, rather than attracting them to factories. That is, improving farming, raising rural wages, and implementing government support programs have lifted millions of people out of poverty.

An analysis by researchers at the University of California, San Diego, found that while 37 percent of those lifted out of poverty in China moved from agriculture to manufacturing or services, only 10 percent did so in India. This suggests that it is possible to achieve economic development even in rural areas.

Economists also argue that India needs to introduce new poverty lines. Since the current international poverty line ($2.15) covers almost everyone, it will be difficult to accurately assess further progress. Therefore, the researchers propose to establish a new poverty line that covers the bottom 25-30 percent of the population in terms of income.

Because no matter how much income increases, many people still face financial instability. For example, the cost of healthcare, education, or housing is a burden for many.

The Indian experience shows that there is no single right path to economic development. While industrialization and migration have been seen as the main tools, it has now become clear that rural economic growth can also be effective. In India, millions of people have managed to escape poverty while remaining in the countryside.

This can be a great lesson for other developing countries. It is confirmed that in the fight against poverty, it is not only about building factories, but also about the effective use of existing resources, the development of rural infrastructure and the modernization of agriculture. Follow “Zamin” news on “Telegram”